What caused inflation in the first place?

in oped •  11 months ago 

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https://www.nytimes.com/2023/12/18/opinion/inflation-economists.html

What Krugman is getting wrong is who/what caused the inflation in the first place: The Federal Reserve fully accommodated government deficit spending by open market purchases of Treasuries with money creation sufficient to enable the public to hold the new debt issue.

Then the FR proceeded to enter into their rescue role of fighting the inflation they had caused by raising interest rates.

The best way to fight inflation is to not cause it in the first place!

“Has the war on inflation been definitively won? No. But recession looks like a bigger risk than resurgent inflation. And I worry that this risk will be increased if policymakers listen to people who are reluctant to admit that they got the inflation story wrong and are clinging to a false theory about how we got inflation down.”

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